Excerpts from FRANK HARTZELL’s article in the Mendocino Beacon, June 4, 2009

Ocean Power Technologies’ subsidiary California Wave Energy Partners in it’s “wave energy project proposed off Cape Mendocino has surrendered its Federal Energy Regulatory Commission (FERC) preliminary permit, making two major companies that have abandoned the area in the past two weeks.

The moves come at a time when President Obama’s energy policy has cut funding for wave energy in favor of solar and wind energy development.

The withdrawals leave GreenWave Energy Solutions LLC, with a permit off Mendocino, as the only local wave energy project.

Pacific Gas and Electric Company announced earlier this month they would not seek to develop wave energy off Fort Bragg. However, PG&E has not yet legally abandoned its FERC preliminary permit.

California Wave Energy Partners did just that on May 26, telling FERC their parent company, Ocean Power Technologies (OPT) was pulling out of California in favor of developing wave energy more seriously in Oregon.

The project was proposed near Centerville off Humboldt County, south of Eureka on the remote coast of Cape Mendocino.

“OPT subsidiaries are also developing two other projects at Coos Bay and Reedsport,” wrote Herbert Nock of OPT. “During the process of developing these projects, OPT has learned the importance of community involvement in the project definition and permitting process.

“OPT therefore feels it is in the best interests of all parties to focus its efforts (in Oregon) at this time. This will allow the time and resources necessary to responsibly develop these sites for the benefit of the coastal community and the state,” Nock wrote.

The Cape Mendocino project was to be situated in a prime wave energy spot, but with connections to the power grid still to be determined. The project was never the subject of a public meeting in Mendocino County and stayed under the radar compared to several other Humboldt County projects. PG&E still plans to develop its WaveConnect project off Eureka.

Brandi Ehlers, a PG&E spokeswoman, said PG&E plans to relinquish the preliminary permit for the Mendocino Wave Connect project soon.

She said the utility spent $75,000 on the Mendocino County portion of Wave Connect before stopping because Noyo Harbor was ill-equipped to deal with an offshore energy plant.

“PG&E is not currently pursuing applications for new FERC hydrokinetic preliminary permits, but it is important that we continue to explore other possibilities,” Ehlers said in response to a question.

Secretary of the Interior Ken Salazar has announced that his department will host 12 public workshops this month to discuss the newly-issued regulatory program for renewable energy development on the U.S. Outer Continental Shelf.

All the meetings are to be held in large cities — in Seattle June 24, Portland on June 25, and San Francisco on June 26.

Salazar restarted the process of building a framework for energy development in the ocean, which had been started in the Bush Administration but never finished.

The new program establishes a process for granting leases, easements, and rights-of-way for offshore renewable energy projects as well as methods for sharing revenues generated from OCS renewable energy projects with adjacent coastal States. The rules for alternative energy development in the oceans become effective June 29.

Most of the actual ocean energy development figures are for the Atlantic and Gulf of Mexico. The Pacific Ocean’s near-shore slopes are too steep and too deep for current wind energy technology. Wave and tidal energy are still in their infancy, not seen as able to help with President Obama’s energy plan.

The Obama administration has proposed a 25% cut in the research and development budget for wave and tidal power, according to an in-depth report in the Tacoma, Wash., News Tribune.

At the same time the White House sought an 82% increase in solar power research funding, a 36% increase in wind power funding and a 14% increase in geothermal funding. But it looked to cut wave and tidal research funding from $40 million to $30 million, the News Tribune reported.

Interior’s Minerals Management Service, the agency charged with regulating renewable energy development on the Outer Continental Shelf [and specifically wind energy projects], is organizing and conducting the workshops, which will begin with a detailed presentation and then open the floor to a question and answer session. All workshops are open to the public and anyone interested in offshore renewable energy production is encouraged to participate.”

In Octoberr 2008 Grays Harbor Ocean Energy applied for seven Federal Energy Regulatory Commission (FERC) preliminary permits for projects located in the Atlantic Ocean about 12 to 25 miles offshore off the coasts of New York, Massachusetts, and Rhode Island, and in the Pacific Ocean about 5 to 30 miles off the coasts of California and Hawaii.

On April 9, 2009 FERC and MMS signed a Memorandum of Understanding (MOU) clarifying jurisdictional responsibilities for renewable energy projects in offshore waters on the Outer Continental Shelf (OCS). The stated goals of this MOU are to establish a cohesive, streamlined process, encouraging development of wind, solar, and ocean or wave energy projects.

In this MOU, FERC agrees to not issue preliminary permits for ocean or wave projects that are located on the Outer Continental Shelf.

And as a result, on April 17, 2009 FERC dismissed all seven Grays Harbor’s pending preliminary permit applications for its proposed wave projects as each and every project is located on the OCS.

The framework establishes how leases will be issued and sets in place revenue sharing with nearby coastal states that will receive 27.5% of the royalties that will be generated from the electricity production.

Interior Secretary Ken Salazar said in an interview that applications are expected for dozens of proposed offshore wind projects, many off the north and central Atlantic in the coming months. “This will open the gates for them to move forward … It sets the rules of the road,” Salazer said.

Actual lease approvals will take longer.

Salazar said he expects the first electricity production from some of the offshore projects in two or three years, probably off the Atlantic Coast.

President Barack Obama, marking Earth Day during an appearances in Iowa, welcomed “the bold steps toward opening America’s oceans and new energy frontier.”

The offshore leasing rules for electricity production from wind, ocean currents and tidal waves had stalled for two years because of a jurisdictional dispute between the Interior Department and the Federal Energy Regulatory Commission over responsibility for ocean current projects.

That disagreement was resolved earlier this month in a memorandum of understanding signed by Salazar and FERC Chairman Jon Wellinghoff.

The department’s Minerals Management Service will control offshore wind and solar projects and issue leases and easements for wave and ocean current energy development. The energy regulatory agency will issue licenses for building and operating wave and ocean current projects.

Salazar repeatedly has championed the development of offshore wind turbine-generated energy, especially off the central Atlantic Coast where the potential for wind as an electricity source is believe to be huge.

He said he has had numerous requests from governors and senators from Atlantic Coastal states to move forward with offshore wind development. State are interested in not only the close availability of wind-generated electricity for the populous Northeast, but also the potential for additional state revenue.

“We expect there will be significant revenue that will be generated,” Salazar said.

Under the framework nearby coastal states would receive 27.5% and the federal government the rest.

Currently there is a proposal for a wind farm off Nantucket Sound, Mass., known as Cape Wind, which has been under review separately from the regulation announced Wednesday. The Interior Department said no decision has been made on the Cape Wind project, but if it is approved it will be subject to the terms of the new rules.

WASHINGTON, DC – In a joint statement issued today Secretary of the Interior (DOI), Ken Salazar and Acting Chairman of the Federal Energy Regulatory Commission (FERC) Jon Wellinghoff announced that the two agencies have confirmed their intent to work together to facilitate the permitting of renewable energy in offshore waters.

“Our renewable energy is too important for bureaucratic turf battles to slow down our progress. I am proud that we have reached an agreement with the Federal Energy Regulatory Commission regarding our respective roles in approving offshore renewable energy projects. This agreement will help sweep aside red tape so that our country can capture the great power of wave, tidal, wind and solar power off our coasts,” Secretary Salazar said.

“FERC is pleased to be working with the Department of the Interior and Secretary Salazar on a procedure that will help get renewable energy projects off the drawing board and onto the Outer Continental Shelf,” Acting FERC Chairman Jon Wellinghoff said.

Below is the joint Statement between DOI and FERC signed by Secretary Salazar and Acting Chairmain Wellinghoff:

JOINT STATEMENT BY THE SECRETARY OF THE INTERIOR AND THE ACTING CHAIRMAN OF THE FEDERAL ENERGY REGULATORY COMMISSION ON THE DEVELOPMENT OF RENEWABLE ENERGY RESOURCES ON THE OUTER CONTINENTAL SHELF

The United States has significant renewable energy resources in offshore waters, including wind energy, solar energy, and wave and ocean current energy.

Under the Outer Continental Shelf Lands Act, the Secretary of the Interior, acting through the Minerals Management Service, has the authority to grant leases, easements, and rights-of-way on the outer continental shelf for the development of oil and gas resources. The Energy Policy Act of 2005 amended the Outer Continental Shelf Lands Act to provide the Interior Department with parallel permitting authority with regard to the production, transportation, or transmission of energy from additional sources of energy on the outer continental shelf, including renewable energy sources.

The Interior Department’s responsibility for the permitting and development of renewable energy resources on the outer continental shelf is broad. In particular, the Department of the Interior has permitting and development authority over wind power projects that use offshore resources beyond state waters.

Interior’s authority does not diminish existing responsibilities that other agencies have with regard to the outer continental shelf. In that regard, under the Federal Power Act, the Federal Energy Regulatory Commission has the statutory responsibility to oversee the development of hydropower resources in navigable waters of the United States. “Hydrokinetic” power potentially can be developed offshore through new technologies that seek to convert wave, tidal and ocean current energy to electricity. FERC will have the primary responsibility to manage the licensing of such projects in offshore waters pursuant to the Federal Power Act, using procedures developed for hydropower licenses, and with the active involvement of relevant federal land and resource agencies, including the Department of the Interior.

We have requested our staffs to prepare a short Memorandum of Understanding that sets forth these principles, and which describes the process by which permits and licenses related to renewable energy resources in offshore waters will be developed.

While the Obama administration has touted offshore renewable energy development, a turf fight between two federal agencies has stymied the government’s ability to issue rules needed to approve wind energy projects off America’s coasts.

Interior Secretary Ken Salazar said Monday the infighting has got to stop.

“It will be resolved,” Salazar said in response to questions about the dispute. “We will not let any of the jurisdictional turf battles of the past get in the way of our moving forward with the renewable energy agenda.”

The dispute, which dates to late 2007, pits the Interior Department against the Federal Energy Regulatory Commission over which entity should approve projects that use coastal waves and currents to produce power.

Offshore wind development has been entangled in the dispute because Interior’s Mineral Management Service does not want to separate wind projects from the tidal wave, or hydrokinetic power, programs – which FERC in turn has refused to surrender, according to several officials who have followed the dispute.

Interior and FERC are said to be close to agreement on a “memorandum of understanding” that would delineate each organization’s involvement in the offshore renewable energy approval process.

Salazar has been vocal in his call for more aggressive development of renewable energy projects off the country’s coasts, especially off the northern and central Atlantic. He said the governors of New Jersey and Delaware have asked what is holding up the regulations and said projects off their coasts are ready to go.

Jon Wellinghoff, acting chairman of FERC, played down the interagency dispute and – like Salazar – said he was confident the problem will soon be worked out.

“It’s less of a dispute than people say it is,” insisted Wellinghoff in a brief interview, adding that he doubted it has stopped any wind projects.

“It has nothing to do with wind. It only has to do with our jurisdiction over hydrokinetic systems, whether they are on the Outer Continental Shelf or not,” said Wellinghoff. He said he saw no reason why the Mineral Management Service would insist on viewing the tidal wave and wind issues together.

Salazar over the past week met with Wellinghoff to try to work out a memorandum of understanding that could be issued as early as this week. Both men are expected to be asked about the disagreement at a Senate Energy and Natural Resources Committee hearing Tuesday.

“If we don’t resolve the jurisdictional issues between FERC and the Department of Interior, we are not going to be able to move forward in the development of our offshore renewable energy resources,” said Salazar.

Mike Olsen, an attorney who represents Deep Water Wind, a company that wants to build a 96-turbine wind farm off the New Jersey coast, calls the dispute a classic government turf battle.

“It’s two agencies both feeling each has specific authority and jurisdiction. Neither one wants to yield its authority or jurisdiction to the other,” said Olsen, who as a deputy assistant Interior secretary in the Bush administration observed the dispute first hand.

Interior waged “a full court press” to get the rules on offshore renewable energy development finalize last year, Olsen said, but the effort was thwarted by the lack of an agreement with FERC.

“From our perspective the rule was ready to go in November,” said Olsen. But despite involvement of the Bush White House, no memorandum of understanding on the jurisdiction issue could be hammered out between Interior and FERC.

With a new administration on the horizon “the battle was put on hold,” he said.

Secretary of the Interior Ken Salazar announced today that he has just signed his first order establishing renewable energy generation as the top priority of the Department of the Interior. Following President Obama’s lead in steering the United States into this new energy path, he said this agenda would create jobs and grow investment and innovation at home. Also noted was that the DOI will focus mostly in western states for generation of electricity through renewable energy (solar, wind, wave, geothermal, biomass).

Secretary Salazar illustrated this opportunity with the Bureau of Land Management backlog over 200 solar energy projects and over 20 wind projects in western states alone. There have yet been any permits or jobs created for these renewable energy projects to be fast-tracked in consideration, evaluated in terms of environmental impact and anticipating the acceptable projects will move forward swiftly.

Starting today, renewable energy projects in solar, wind, small hydro, geothermal and biomass will benefit in priority treatment to generate electricity and renewable energy. And Secretary Salazar stated that a newly-formed energy and climate change task force is already working hard, nights and weekend to develop these plans (since January 20th) for presentation to a Dept. of Energy committee soon.

In tandem, Secretary Salazar indicated that through cross-departmental effort (BLM, EPA, Dept. of Energy, MMS, FERC and others), his goal is to rapidly and responsibly move forward with Obama’s renewable energy agenda to develop and upgrade the United States electric transmission grid.

When asked about Cape Wind off Cape Cod, Mr. Salazar indicate that “after we hold our hearings around the country [for MMS rulemaking] the jurisdictional issues between the Federal Energy Regulatory Commission and Minerals Management Service shall be accomplished within this year.” Many projects are being inhibited and we are actively clearing the path to move forward.

The roadshow planned by Secretary Salazar shall help identify renewable energy zones (solar energy in western states minus ecological sensitivity (reduction). He explained that today, through solar energy in the western states alone, we may produce 88% of all of the energy needs and adding wind takes it over 100%. This also fuels the need for a national transmission system as a high priority.

Salazar also called for the need to finalize and renew offshore renewable energy rules that protect the United States landscapes, wildlife and environment as we serve as steward of our lands.

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